It said in a note that the deal is in line with the group's strategy to execute fast turnaround projects to rise through the current slowdown in the property market.
"Its past “one-off” projects, such as Sunway Mont Residences and Sunway Avila in Wangsa Maju have been well received," it added.
RHB raised its its earnings forecast for FY21 by 1% as it expects the project have its maiden launch in the second half of 2020.
To recap, Sunway yesterday announced that its 60%-owned joint venture Sunway PKNS had entered into a privatisation agreement wtih Perbadanan Kemajuan Negeri Selangor (PKNS) to accept the rights to develop a 9.458-acre leasehold land in Kota Damansara.
"Sunway will have to pay a total of MYR124.6m progressively, comprising MYR36.6m for the rights to develop; MYR50m or 8.88% of GDV as revenue sharing – to be paid in four tranches up to the completion of the project; and 40% profit sharing, which is approximately MYR38m," it said.
RHB said the land cost of about RM300 psf is reasonable as the payment for the rights' value and revenue are on a deferred payment basis.
The tract has a plot ratio of four, and will be developed into serviced apartments of about 825 units with some lifestyle retail units.
The project has an estimated GDV of RM544mil with a development period of five years to 2025.
RHB maintained its buy call in Sunway Bhd with a higher target price of RM1.86 from RM1.85 previously
"We like Sunway for its opportunistic landbank strategy, and investments in the quarry division.
"Near-term earnings should be underpinned by MYR2.2bn unbilled sales, and MYR5.7bn outstanding construction orderbook," it said.
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